06.14.2001
NT$ - let loose…or will it ever?

• Development: The NT$ fell 1.0% yesterday to close at NT$34.4/US$1, in tandem with a 0.4% fall in the Yen. The NT$ has already depreciated 4.6% since mid-May.

• Analysis: To maintain Taiwan’s export competitiveness, CBC allowing gradual depreciation of NT$ to bring in line with Yen, albeit we view as demand driven.

• Primasia view: NT$ is trading below our end-2Q01 forecast of NT$34.0/US$1. NT$ is likely to depreciate further and test NT$35.0/US$1 under CBC supervision. The NT$ downside will be limited by falling interest rates in the US.

IrmakSurenkok@Primasia.com +886-[0]2-2547-8873